The Business Advisory Blog

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Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.

Changes to how the annual leave balance is displayed

You can set up payroll to show annual leave an employee can take in advance of becoming entitled to it.

When you set up a new employee in payroll, or make changes to an existing employee’s working hours, Xero will automatically calculate their annual leave entitlement.

The biggest addition is that you can now set up an employee’s annual leave balance to display the amount of leave they can take in advance.

An employee who previously had no leave in their balance, for instance, might now have some leave available — this is their ‘leave available to take in advance.’

To make it easy for you, this new feature is enabled by default for all new employees you set up in payroll. You can easily switch it on for existing employees:

From Payroll, select Employees and choose an existing employee.

Navigate to the Leave tab and click on Annual Leave balance.

Tick the box to Include leave available to take in advance in the balance and Save.

Once you’ve turned this option on, your employees’ annual leave balances – including leave available in advance – will show on their payslips in the employee portal and Xero Me mobile app. To keep things simple, only payroll admins will now see holiday pay balance in dollars when this option is turned on.

Automatic calculation of hours accrued annually

You no longer have to manually enter hours accrued annually for employees. It’s automatically calculated based on their weekly hours multiplied by half their holiday pay percentage.

For employees who aren’t subject to the Holidays Act — such as business owners who pay themselves — you can set the holiday pay percentage to zero and they won’t accrue annual leave.